Note 18 - Subsequent Event

3 Months Ended

Mar. 31, 2020

Notes to Financial Statements

Subsequent Events [Text Block]

Note

18

. Subsequent Event

Paycheck Protection Program

In the

second

quarter of

2020,

certain wholly-owned subsidiaries of Avalon entered into agreements to receive a total of approximately

$2.8

million in loans under The Paycheck Protection Program contained in The Coronavirus Aid, Relief, and Economic Security (“CARES”) Act. The Paycheck Protection Program (the “Program”) provides for

100%

federally guaranteed loans to small businesses to allow employers to keep workers employed and maintain payroll during the pandemic and economic downtown. Under the Program, qualified companies are eligible for a loan in an amount equal to the lesser of

$10

million or

2.5x

the business’s average monthly payroll. Collateral or guarantor support is

not

required for the loan.

Under the Program, the borrower is eligible for loan forgiveness up to the amount the borrower spends on certain eligible costs during the

8

-week period beginning on the date of the origination of the loan. Eligible costs under the Program include payroll costs, interest on mortgage obligations incurred before the covered period, rent on leasing agreements and utility services. The amount of loan forgiveness is reduced if there is a reduction in the number of employees or a reduction of greater than

25%

in wages paid to employees. Under the Program, a reduction in employment or wages that occurred during the period beginning on

February 15, 2020

and ending

30

days after enactment of the CARES Act do

not

reduce the amount of loan forgiveness if by

June 30, 2020

the borrower eliminates the reduction in employees or reduction in wages. Under the Program, proceeds that are

not

forgiven convert to a loan bearing interest at a fixed rate of

1%

payable in

18

equal installments commencing in

November

and

December 2020.

The Company anticipates that it will utilize the proceeds in accordance with the Program’s guidelines and repay amounts that are

not

forgiven or utilized.